Cross-border tax terms — L
5 terms beginning with L, each defined at mechanism level.
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Each entry answers two questions — what the term picks out, and what changes once it applies. Neither answer needs a number, and a number in a definition tends to outlive its accuracy.
Terminology is where cross-border risk hides. The rate is visible and gets checked; the classification is invisible and does not, which is why the classification is what usually goes wrong. So every entry is written in three parts: the meaning, the point at which it costs something, and the filings on this site that it governs.
The question worth asking is not what a term like this means but whether it applies to you this year. That is a computation on your facts. Every page here carries the name of the person who reviewed it and the date they did.
- Limitation on benefits — A treaty eligibility test written to deny benefits to conduit entities, applied through ownership, listing, active-business and base-erosion conditions.
- Lower deduction certificate — An Indian certificate authorising deduction at a reduced rate, applied for before the payment and the practical answer to a deduction computed on gross consideration.
- Local file — The transfer-pricing document covering one entity's controlled transactions, functional analysis, method and comparables.
- Liaison office — An Indian form of presence that may not earn income.
- LRS — India's liberalised remittance scheme, permitting resident individuals to remit funds abroad within an annual limit for declared purposes.
What the L entries have in common
5 terms begin with L. The term below is defined in full on its own page, alongside the filings it governs and the fee for dealing with them. Three to start with: Limitation on benefits, Lower deduction certificate and Local file.
Nearby letters
J — 2 terms · M — 7 terms. The full A–Z lists all 297 terms in one place.
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Cross-border situations we are engaged for
A Secondment Whose Paperwork Decided the Tax
Who employs, who directs and who bears the cost are the facts a treaty article turns on, and an assignment letter is where they are recorded. Drafting it with the tax position in view prevents an argument later.
Read how this one runsFifteen Per Cent Held Back From a Fee for Services in Canada
A payer must withhold from fees paid to a non-resident for services rendered in Canada, whether or not any tax is ultimately owed. A waiver applied for before the work is invoiced avoids the withholding; after it, the money comes back through a return.
Read how this one runsDeduction at Source on Deposit Interest, Recovered
Where the treaty rate is lower than what was deducted, the difference comes back through a return rather than at source. The file establishes entitlement and files for the years still open.
Read how this one runsAn Indian Company Paying a Foreign Supplier
Payments abroad carry deduction at source and a certification filed before the money moves. Whether the treaty reduces the rate depends on what is being bought, and the classification is the decision the whole filing rests on.
Read how this one runsA Student or Researcher Covered by a Treaty Article
Several treaties carry a dedicated article for students, trainees and visiting researchers that displaces the ordinary employment rules. Whether it applies turns on the purpose of the stay and the source of the funds, both of which are evidenced rather than asserted.
Read how this one runsA Residency Determination Review After Leaving the Country
Residence is decided on ties, not on a form, and the review asks for evidence of every one of them. The file assembles the ties that were severed and the ones that remained, and answers the questionnaire against the treaty rather than around it.
Read how this one runsCanadian Pension Paid Abroad and Taxed at the Flat Rate
Pension and annuity payments to a non-resident carry a flat withholding that often exceeds what a return would produce. The alternative filing is elective, and whether it helps depends on the total income for the year rather than on the payment alone.
Read how this one runsOne Employee in a State Nobody Had Registered In
A single person working from home can create payroll registration, withholding and sometimes an income tax filing for the company in that state. The review measures activity against each state's own threshold.
Read how this one runsAll case studies — every published engagement in one place.
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